Department of Justice:

Working Capital Fund Adheres to Some Key Operating Principles but Could Better Measure Performance and Communicate with Customers

GAO-12-289, Jan 20, 2012

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What GAO Found

The Justice Management Division (JMD), the component responsible for managing the working capital fund, effectively tracks fund functions to ensure adherence to applicable fiscal laws and sound management practices. For example, JMD has well-established policies and procedures for tracking and monitoring the four working capital fund functions so that the fund adheres to authorized purposes. Further, JMD structures its reimbursable agreements with customers to facilitate adherence to the Economy Act—the statutory authority underlying most of JMD’s customer orders. JMD also clearly delineates roles and responsibilities, which allows customers to know who to contact with questions and clearly assigns responsibility for obligating and expending funds. Justice also ensures the fund’s self-sufficiency by recovering total costs for the provided services. These actions are consistent with two of the four key operating principles for working capital funds.Customers noted positive benefits from Justice’s shared services but seek more information on rate structures and want assurances that fund costs are equitably distributed. For example, customers said they valued the breadth of services offered as well as the experience of fund staff but wanted to better understand the basis for shared services rates and more opportunities to discuss billing concerns and service changes with JMD. Officials expressed surprise at these concerns. They noted that informal information sharing on rates and rate structures happens regularly, but explained that each staff director has his/her own way of communicating with customers and acknowledged that some may be better at providing customer support than others.

JMD does not systematically measure important aspects of shared service provision and working capital fund management. For example, JMD tracks workload measures such as the number of transactions processed, but does not assess customer satisfaction with shared services. It also does not have measures to assess how effectively it manages the fund, such as whether managers are responsive to concerns about shared service rates or billing issues—areas with which customers have expressed concern. Absent a formal mechanism for customers to provide timely and regular feedback, JMD cannot sufficiently assess whether customer needs are met or have changed. JMD also has not assessed its shared services rates to know whether they provide a good value to customers. If available, specific working capital fund-level performance information would allow JMD to regularly compare actual performance with planned or expected performance. Further, a corresponding management review process could help JMD achieve the efficiencies that working capital funds were designed to produce, potentially freeing up resources that could be realigned for other departmental initiatives. Lastly, performance measures aligned with strategic goals can be used to evaluate whether and how working capital fund activities contribute to departmentwide goals and crosscutting initiatives.

Justice has processes to ensure that excess unobligated balances are used in accordance with legal authorities. It also has an established process to make well-informed decisions on how to spend available funds. However, JMD budget officials told us that these balances were unavailable for departmentwide priorities in recent years because they have been used to meet rescissions.

Why GAO Did This Study

The Department of Justice’s (Justice) working capital fund is intended to provide increased efficiencies in how the department funds and offers shared services—such as payroll, telecommunications, financial services, mail, and publications—valued at over $1 billion annually. Ensuring that the working capital fund is managed as efficiently as possible could allow Justice to use saved resources for other departmental priorities. GAO was asked to determine how Justice (1) manages its working capital fund to promote compliance with applicable fiscal laws and key operating principles, (2) communicates shared services rates with customers, (3) measures performance to evaluate whether fund activities are contributing to agency goals, and (4) ensures that its excess unobligated balances are used in accordance with legal authorities and managed so that Justice can make well-informed funding decisions. GAO reviewed statutory authorities, analyzed Justice policies, interviewed budget and finance officials, and conducted focus groups with some shared services customers.

What GAO Recommends

GAO is making three recommendations to improve the management of the working capital fund, including providing opportunities for two-way substantive communications with customers and developing performance measures for the fund. Justice generally agreed with our findings and recommendations and noted that it will continue to explore ways to address the issues we identified.

For more information, contact Denise M. Fantone at (202) 512-6806 or fantoned@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve the management of the Justice working capital fund, the Attorney General should direct the Assistant Attorney General for Administration (AAG/A) to improve opportunities for two-way substantive communication with shared services customers. This could include developing a means to discuss customer concerns about working capital fund rates and services; organizing breakout sessions on specific lines of business, to be attended by appropriate customer program and finance staff; restructuring the annual CAB meetings to allow further opportunities for two-way communication; conducting a periodic survey or listening session with customers on such topics as their level of satisfaction or potential changes to service needs; or a combination of these.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: In its report, GAO noted that the Justice Management Division (JMD), which oversees the Department of Justice's Working Capital Fund (WCF), did not provide regular opportunities for substantive two-way communication between the WCF staff and its customers. JMD has since changed how it communicates with its WCF customers. For example, it now reserves question and answer time for discussing WCF issues with customers during quarterly budget meetings. JMD also solicited customer opinions and concerns about WCF services during internal meetings and through surveys.

    Recommendation: To improve the management of the Justice working capital fund, the Attorney General should direct the AAG/A to develop performance measures to monitor whether all shared services are provided in an efficient and effective manner. These measures should support goals that align with Justice priorities and, as the departmental needs change over time, provide JMD additional assurance that the level and types of working capital fund services provided support current departmental goals.

    Agency Affected: Department of Justice

    Status: Open

    Comments: On June 15, 2012, DOJ-Justice Management Division (JMD) provided information about some steps that DOJ has taken to address this recommendation. Specifically, they said that through its Budget Staff, already began requesting feedback from customers for the purpose of garnering responses about the efficiency and effectiveness of services provided. JMD plans to use this customer information, to the extent possible, to verify that services align with and support the Department's strategic goals. One example of this effort is FASS' intranet site, which includes a customer service page that allows customers to access information on various services. In addition, FASS recently employed the use of customer satisfaction surveys on their website to better gauge how their services are performing. JMD reported that they will continue to use performance and workload measures and will continue to do so. However, JMD strongly believes that meeting with customers and having face-to-face discussions on customer service can provide the necessary information to adequately gauge customer satisfaction and respond to customer needs.

    Recommendation: To improve the management of the Justice working capital fund, the Attorney General should direct the AAG/A to help ensure that information on the basis of rates for each shared services and sufficiently detailed billing information reaches the appropriate customer staff, especially those in the finance and program offices. This could include posting relevant portions of the operating plan with information on the basis of rate structures on Justice's intranet, requiring both a program office and finance point of contact to be provided in each reimbursable agreement, or organizing periodic dedicated sessions for both program staff and finance customer staff to discuss issues relevant to them.

    Agency Affected: Department of Justice

    Status: Open

    Comments: On June 15, 2012, DOJ-JMD provided information about some steps that DOJ has taken to address this recommendation. Specifically, DOJ reported that they adopted a concept the GAO proposed: The Budget Staff posted relevant information about rate structures, etc. on Justice's intranet for use by program offices, finance staffs, and WCF customers. The Website includes the WCF Services Guide, a WCF Budget Process Overview, the current year's Operating Plans; Rates, etc., as well as a three-year report on the WCF revenue for each DOJ customer. DOJ said that, also at the suggestion of GAO, the Department created and implemented a special e-mail box dedicated to customer-specific reimbursable agreements. To date, the FBI has a fully operational trial e-mail. The Department intends to encourage other WCF customers to establish similar e-mail boxes and will offer to facilitate establishing such boxes no later than the end of the current fiscal year. Further, DOJ reports that they are committed by the end of the fiscal year to offering its WCF customers email portals like that already established with the FBI.